Abstract

In the World Bank’s Doing Business index, the South Asian region ranks low. The low rank suggests that firms face a difficult business environment there. The subindices suggest that South Asian firms encounter serious obstacles in dealing with infrastructure, the tax system, the bureaucracy, political instability, corruption, land acquisition, and environmental issues and in enforcing contracts. Now that it has been empirically proven that FDI benefits South Asian countries, the region undertakes measures to improve this scenario and ensure that the region continues to attract FDI in a sustained manner. This final chapter asks two key questions: (1) What are the major current constraints to FDI inflows? (2) What policy priorities/reforms can enhance FDI?

This chapter explores the difficulties arising out of economic stability, tax and other incentives, labour regulations, work ethics, social and economic infrastructure, and costs of production, potential domestic market, and an overall assessment of political and economic conditions.

References

Athukorala, P-c (2013) Intra-regional FDI and economic integration in South Asia: trends, patterns and prospects. Departmental working papers 2013–05, The Australian National University, Arndt-Corden Department of EconomicsGoogle Scholar